Portrait studios abruptly close in Walmart, Sears and Babies 'R' Us stores

View full size Walmart customers who are waiting for pictures should go to the store's customer service counter, where pictures are expected to continue arriving next week.
They can also go online at www.PictureMe.com, where a statement says products can be ordered at www.myonlineportraits.com through April 18.

A financially struggling operator of more than 2,000 portrait studios in Walmart and Sears stores has abruptly shuttered those outlets, leaving some laid-off workers scrambling -- without pay -- to fulfill customers' orders.

CPI Corp. of St. Louis, Mo., said in a statement on its website that customers waiting for pictures should go to their Sears, PictureMe or Kiddie Kandids studio.

"After many years of providing family portrait photography, we are sad to announce that all of our U.S. portrait studios are now closed.

"We appreciate your patronage and allowing us to capture your precious memories," the company said on its website, which had been wiped clean of other information.

CPI also operated more than 150 Kiddie Kandids photo studios inside Babies 'R' Us stores and malls, a bankrupt competitor it bought in 2010, although it's not clear if any of those are in Northeast Ohio.

The company reported a loss of $56.7 million in 2012, on sales of $361.7 million, according to Hoover's Inc.

It had 11,900 employees as of Feb. 2, 2012, according to its latest annual report.

In a letter to employees, President and Chief Executive Jim Abel said that CPI had negotiated deals with its hosts, borrowed more from banks, and sought potential buyers, but that "unfortunately, all of these efforts have fallen short. The decline of our business proved too great an obstacle to overcome."

CPI owed its lenders $98.5 million, including $76.1 million in unpaid principal, as of March 13, according to the Post-Dispatch.

Sears Holdings Corp. said in an emailed statement that it was working with CPI, which managed and operated Sears Portrait Studios as a licensed business, "to ensure that it fulfills its outstanding orders and provides ordered pictures to our members and customers."

Sears expressed regret for any inconvenience.

A Walmart spokeswoman said CPI, which operated independently inside about 20 percent of Walmart's 3,724 U.S. stores, told the retailer it was closing its studios. Customers who are waiting for pictures should go to the store's customer service counter, where pictures are expected to continue arriving next week.

As the popularity of digital photography cut into its sales, CPI revealed last month in a Securities and Exchange Commission filing that it had received a fourth forbearance agreement from its lenders and that it had until Saturday to meet its loan obligations.

Some suddenly displaced CPI employees, believing the company could wrongly foist the responsibility of filling outstanding customers' orders onto Wal-Mart and Sears, were hustling Friday trying to make good with the clients while absorbing the shock of losing their jobs and related benefits, including insurance coverage.

"There's almost no word to describe this. It's devastating," said Jennifer McDowell, a three-year CPI employee who until Thursday managed a four-employee studio in a Wal-Mart in St. Charles, a St. Louis suburb. "We gave so much for this company and worked so hard."

McDowell, 34, hastily burned as many undelivered portrait packages as she could onto compact discs on Thursday. By Friday, she tried to spread the word to those customers that she'd be at a nearby pet store's parking lot Saturday with those CDs.

"There's a chance (CPI) was not going to make good on their promises to customers, and if they don't, they make us look like liars," McDowell said.

"Leaving the clients in the lurch is not right. My dad always told me that evil persists when good men stand by and do nothing. So we're trying to do our best to take care of our customers even now. That's where our loyalty lies."

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